Kohl’s announced on Friday that it plans to shut down 27 of its underperforming stores across 15 states by April, which represents just a small portion of its total 1,150 locations. This move is part of the company’s efforts to enhance profitability and address declining sales figures.
The decision comes in the wake of Kohl’s experiencing 11 consecutive quarters of declining sales. In a significant leadership change, Ashley Buchanan, the current CEO of Michaels and an experienced figure in retail, will take over as the new CEO of Kohl’s next week. She will succeed Tom Kingsbury, who has been serving as the interim CEO since December 2022 and was formally appointed to the role in February 2023. Kingsbury will continue to advise Buchanan and will remain a member of Kohl’s board until he finishes his term in May.
While Kohl’s has not disclosed the exact number of employees impacted by the store closures, it did mention that the affected staff have already been notified. Employees have been given the option of receiving a “competitive severance package” or the opportunity to apply for other available positions within the company. Among the locations marked for closure, 10 are situated in California.
“In pursuing our long-term growth strategy, it’s crucial to make tough yet necessary decisions that will benefit the future of our business, our customers, and our teams,” Kingsbury stated.
The retail landscape for department stores in the U.S. has faced significant challenges as consumers increasingly favor online shopping deals.
In a related development, Macy’s recently announced plans to close 66 stores in the early part of this year, including one located in a historic landmark in Philadelphia. Most of these closures will occur during the first quarter of Macy’s fiscal year, as part of a strategy previously outlined in February 2024. This plan aims to close approximately 150 underperforming outlets and upgrade the remaining 350 stores by the fiscal year 2026. These actions come as Macy’s seeks to bolster sales amid a reduction in consumer spending on non-essential goods, a trend influenced by high inflation rates.
Macy’s recently reported a decline in both profit and sales during its fiscal third quarter. Although the company has increased its sales expectations for the current fiscal year, it has reduced its profit forecasts. The stores slated for closure together account for about 25% of Macy’s total square footage, but contribute less than 10% to overall sales.
